prijava
SARAJEVO, December 13 (FENA) - The newly elected President of the Academy of Sciences and Arts of Bosnia and Herzegovina, academician Muris Čičić, said in an interview with FENA that the public discourse somehow imposed a false dilemma over being for or against a new arrangement with the International Monetary Fund. (IMF).
This economic expert is of the opinion that in this regard, and in the context of the new circumstances, there should be no dilemma and that a new loan from the IMF is very much needed in Bosnia and Herzegovina.
Elaborating on the issue in a broader professional and expert sense, he referred to the principle that a loan is never needed if there is a way to cover one's own needs from other sources, emphasizing how a loan is a option when there are not many alternatives.
"In this particular case, a dilemma was created around the IMF over a false presumption. In essence, we have been taking loans from the IMF for decades, and the question has never been asked in that context. Should we take it? Of course, we should, if there is a deficit in the budget that cannot be covered in any other way," Čičić explained.
The letter of intent with the IMF is, as he said, just a continuation of long-term cooperation with that institution, "where the IMF has always been a very reliable partner, just as BiH was a good partner to that institution in terms of regular debt repayment and fulfillment of conditions set by the IMF."
In support of the arguments presented, Čičić recalls the specific situation caused by the Covid-19 pandemic, which led to significant disruptions in economic and other activities in Bosnia and Herzegovina, and jeopardized the operations of a large number of companies and led to unemployment or layoffs due to limited business activities.
"In my opinion, the suspicions that arise from some fellow analysts are not justified. I think that it is not serious to question something that will ensure the functioning of health, education, security, pension system, and all those elements that are necessary for the functioning of our society," stressed Čičić categorically, stating that the arrangement with the IMF is good because that institution always makes demands on the governments with which it negotiates in terms of a positive effect on the monetary and financial stability of a particular state.
When asked how he assesses the relations in the current convocation of the Government of the Federation of BiH towards debt and borrowing, in connection with the indicators that show that after the continuous growth of debt in the FBiH from 2008 to 2014, in the current convocation, until March this year, the debt has been cut by more than 560 million KM, and internal debt by 301 million KM, Čičić points out that these indicators show that the FBiH Government operated with a lot of care and good intentions and that it always reserved an adequate part in the budget balances for loan repayment.
He reiterated, having in mind all the mentioned parameters, as well as low-interest rates, grace period and professional assistance, that the new arrangement with the IMF should be realized, stating that about 500 million KM from that source is planned for the Federation of BiH and that the Government of the FBiH plans to borrow through various types of securities for another 600 million KM and it also counts on another 150 million KM which will be received from the special fund of the European Union (EU).
At the same time, referring to the state level, he points out that BiH is not an over-indebted country and that all obligations arising from the budget are being properly met.
"BiH's internal and external debt is at the level of about 40 percent of GDP, which is considered an acceptable level of indebtedness according to international standards, the Maastricht criteria, which are a prerequisite for joining the eurozone. Up to 60 percent of GDP can be serviced/repaid, as BiH has proven, especially the FBiH Government.
This government did well in the given conditions. The budget has been fairly stable. All obligations were serviced regularly and the FBiH Government played a significant role in that They planned and budgeted well, that is, they covered both, the revenue and expenditure sides. Having all this in mind, we must recognize that the system functioned well," concluded Čičić.
(FENA) S. R.
